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AARP Stands by as Obama Gets Mugged by Reality

Abby Coleman 10/08/2012

The President’s erstwhile ally in the Obamacare debate says it doesn’t want to get involved.

During last week’s presidential debate, realizing that he was taking a beating on the Medicare solvency issue, Barack Obama issued the following cri de coeur: “AARP thinks that the savings that we obtained from Medicare bolster the system, lengthen the Medicare trust fund by eight years.” Later, after enduring several more blows to his credibility, the President went on to claim AARP agreed with him that Romney’s plan would weaken Medicare. Oddly, the “senior advocacy organization” took offense at these remarks. Having provided full-throated support to the President and the Democrats on Obamacare, and resisted Medicare reform, AARP has begun to revert to its nonpartisan pose now that Obama appears to be in trouble.

On Thursday, AARP issued this statement: “AARP has never consented to the use of its name by any candidate or political campaign. AARP is a nonpartisan organization and we do not endorse political candidates nor coordinate with any candidate or political party.” The hypocrisy of this statement is breathtaking. AARP actively supported Obama and congressional Democrats on Obamacare knowing full well that it would cut Medicare Advantage (MA), an enormously popular program among seniors, by $200 billion. This obvious betrayal of its members was driven by the knowledge that these MA cuts would force millions of seniors back to traditional Medicare and create a captive market for AARP’s “Medigap” policies.

As I have written previously, this conflict of interest was not lost on the House Ways and Means Committee. Last year, it conducted hearings for the purpose of “getting to the bottom of how AARP’s financial interests affect their self-stated mission of enhancing senior’s quality of life. It is important to better understand how AARP’s insurance business overlaps with its advocacy efforts and whether such overlap is appropriate.” This didn’t require much digging. AARP derives only about 20% its annual revenue from membership dues. Meanwhile, the organization earns more than $1 billion per year by endorsing various products, including “Medigap” insurance policies that pay medical charges not covered by traditional Medicare.

This is why AARP still supports the Obama administration’s fiscally unsustainable policy of pursuing the status quo on entitlements, and why it stands in the way of the Medicare reform proposal sponsored by Paul Ryan and Democrat Ron Wyden. AARP’s official position on the Ryan-Wyden plan is that they continue to review it to make sure that it doesn’t “result in more cost shifting to older Americans, and whether it will improve health care quality and delivery.” Its actual position, however, was made abundantly clear when Ryan spoke to the AARP convention in September. Ryan was booed every time he mentioned the repeal of Obamacare or voiced opposition to the irresponsible Obama policy on Social Security.

But don’t mistake those boos for the sentiments of the rank-and-file members of AARP. As evidenced by a staff report prepared in September for Jim DeMint and a Politico column the GOP Senator wrote to highlight its findings, the people who pay membership dues to the organization were overwhelming against ObamaCare even as AARP pushed for its passage: “AARP endorsed ‘Obamacare,’ though the organization’s call response logs indicate opponents outnumbered supporters by more than 50 to 1.” In other words, AARP ignored the obvious wishes of its own members. Thus DeMint concludes, “AARP knows it can protect its financial interests by aligning with Democrats, no matter what its members think.”

Unless, of course, it begins to look like the Democrats and their President might get the bum’s rush in November. By the time Mitt Romney had locked up the GOP presidential nomination and actually began to pull ahead in some polls after choosing Paul Ryan as his running mate, AARP began to put some distance itself and the Obama administration. This is why, when the Obama re-election campaign began running campaign ads invoking AARP “studies” showing that the Ryan-Wyden plan would somehow lead to higher costs for seniors, AARP issued the following statement: “We were not aware of nor have any involvement with this campaign ad. AARP is a nonpartisan organization and we do not endorse political candidates.”

Conspicuously absent from this August statement, however, was any attempt to refute the content of the ad, which contained a number of brazen misrepresentations, including the claim that the Republican plan was a “voucher” system and that it would raise costs to seniors by “more than $6,000.” This reluctance to set the record straight was also evident, after last week’s debate, when AARP reiterated its ostensible policy of not endorsing political candidates. The organization allegedly remains “focused on providing voters with balanced information on where candidates stand on the key issues, so they can make their own decisions on Election Day,” yet failed to refute even the most preposterous of Obama’s claims.

Still, reading between the lines of AARP’s post-debate statement, it’s possible to detect some uneasiness on the part of the organization’s executives. It’s unlikely that the reference to the “You’ve Earned a Say” campaign is unconnected with the public exposure of their utter indifference to the 50 to 1 opposition of AARP’s members to Obamacare. If Obama and the Democrats continue to be mugged by the ugly realities they have created, we’ll hear more from AARP about nonpartisanship and to see its leadership stand idly by as their erstwhile friends endure the beating. But it’s probably too late. If the GOP gains control of the White House and the Senate, the AARP will lose its cash cow after a well-deserved roughing up.

David Catron is a health care revenue cycle expert who has spent more than twenty years working for and consulting with hospitals and medical practices. He has an MBA from the University of Georgia and blogs at Health Care BS.

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